Diverging Rent Trends Across US Cities Linked to Migration and Overbuilding
A study shows rents climbing in New York and Chicago but dropping about 8% in Austin, reflecting slower in-migration and a surge in new housing supply.
Aziz Sunderji, founder of the housing-market publication Home Economics, examined rent movements in 21 U.S. metros since mid-2023. He found that New York, San Francisco and Chicago posted the strongest rent gains, while Austin, San Antonio, Denver, Phoenix and Dallas saw declines of up to about 8 percent. The study links the drops to a combination of slowed migration into those cities and a backlog of residential projects approved during the 2021-2023 demand boom, creating excess inventory.
Sunderji describes this as a “timing mistake” by developers who over-built after an early surge in demand. Areas with historically high rent-to-income ratios also experienced sharper falls. Remote-work and tech-job concentrations had minimal influence, and the appeal of warm winters played only a secondary role. City-level policy efforts, such as New York’s rent-freeze and the Block-by-Block affordable-housing initiative, are not seen as the main cause of the rent shifts.
Why it matters
Understanding these rent dynamics helps renters, investors and policymakers gauge housing affordability and market risks.
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